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June 25, 2006

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Sturt

The big factor not mentioned in Finnegan's article is why it is that the United States has effectively ceded the global shipping business to foreign players: a little piece of protectionism called the Jones Act. The Jones Act reserves US intercoastal shipping solely to US owned, operated, and crewed lines using only US-bukld ships. It dates back to the Civil War. When the US was over 50% of global shipping as it was after WWII this was lucrative. As global trade expanded its value diminished, as did the fortunes of US shippers, who preferred their cosy domestic monopoly to the global market. As a consequence there is no US shipping industry able to operate internationally, and thus US security , the interest supposedly protected by the Jones Act, is arguably weakened. A perfect illustration of the folly of protectionism.

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